Multiple insiders bought Federal Agricultural Mortgage Corporation (NYSE:AGM) stock earlier this year, a positive sign for shareholders
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Federal Agricultural Mortgage Corporation's (NYSE:AGM) instance, it's good news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Federal Agricultural Mortgage
The Last 12 Months Of Insider Transactions At Federal Agricultural Mortgage
In the last twelve months, the biggest single purchase by an insider was when Independent Director Robert Sexton bought US$233k worth of shares at a price of US$117 per share. That means that even when the share price was higher than US$107 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months insiders purchased 3.00k shares for US$336k. But insiders sold 614.00 shares worth US$70k. In the last twelve months there was more buying than selling by Federal Agricultural Mortgage insiders. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does Federal Agricultural Mortgage Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Federal Agricultural Mortgage insiders own about US$17m worth of shares. That equates to 1.5% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Federal Agricultural Mortgage Tell Us?
The fact that there have been no Federal Agricultural Mortgage insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Federal Agricultural Mortgage and their transactions don't cause us concern. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Every company has risks, and we've spotted 1 warning sign for Federal Agricultural Mortgage you should know about.
But note: Federal Agricultural Mortgage may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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